DWA Entertainment Law Update - June 2020

COVID-SAFE GUIDELINES; CALLS FOR GOVERNMENT BACKED INSURANCE

AND CONTRACTUAL CLAUSES TO ADDRESS COVID-19

COVID-SAFE GUIDELINES:

The Australian Screen Sector Task Force has developed and released the first version of the Australian Screen Production Industry COVID-Safe Guidelines.

The Guidelines have been produced to provide guidance on how to minimise the risks of COVID-19 for screen production businesses looking to recommence productions. The Guidelines are intended to assist producers in undertaking risk assessments and developing their own COVID-Safe risk mitigation plan.

While the Guidelines do not set out a draft risk mitigation plan or policy for screen businesses, they do provide guidance on how screen businesses should undertake risk management and how such risks can be mitigated by control measurements.

The Guidelines set out two different types of Control Measures:

1.      Mandatory Control Measures: these are the control measures which are based on government advice and are applicable to all screen productions;

2.      Optional Control Measures: these are control measures which are specific to the screen industry and include measures which apply to different phases of production and different departments. Screen businesses should review and incorporate the Optional Control Measures that are appropriate for their production.

In addition, the Guidelines provide a useful reminder of work health and safety obligations for persons conducing a business or undertaking and the requirement to consult with workers on work health and safety matters. As the Guidelines don’t provide specific information on how best to achieve consultation with workers, we recommend that production businesses agree on appropriate consultation procedures at the outset and follow these procedures for the duration of the production. Production companies should consider whether it is appropriate to have work health and safety representatives on set; the regularity and structure of meetings with the production and relevant teams and whether it is appropriate to use a platform/app or other type of technology to facilitate the consultative process.

We can assist producers with establishing their own risk management plan and relevant COVID-19 policies. Please contact us for a free discussion around your COVID-19 plans and policies.

CALLS FOR GOVERNMENT TO UNDERWRITE COVID-19 INSURANCE:

We are consistently seeing insurance providers exclude COVID-19 from production insurance policies. The lack of insurance coverage is a serious concern for independent production companies planning to commence or recommence productions. This concern has been echoed by independent producers such as CJZ and See-Saw Films who have made a submission which calls on the Federal Government to underwrite the COVID-19 risk to productions.

The submission is detailed in the IF article, the Government would assume liability for the COVID-19 exclusions in film insurance policies and producers would pay an excess of $20,000 or 1% of the production budget to cover any low impact virus-related disruption.

The submission has been sent to Paul Fletcher, Minister for Communications, Cyber Safety and the Arts and Paul Fletcher has ordered his department to look into the insurance issue according to an Australian Financial review article.

We strongly support this submission and the rationale behind it. In the current circumstances, it is essential the producers have in place insurance policies which reduce the risk of COVID-19 for the production and relevant stakeholders (e.g. commissioning entities, financiers, distributors, etc). With insurers unlikely to change their position on the matter, we feel that the Government is best placed to step in an assume the risk

If you have any questions about your insurance policies and COVID-19 exclusions, please get in touch.

CONTRACTUAL CLAUSES AND COVID-19:

With COVID-19 causing so much uncertainty, we recommend that producers carefully review their production agreements to make provisions for COVID-19. In addition to reviewing broader contractual elements (e.g. termination rights, indemnity, waivers and releases, liability provisions, insurance provisions, etc), we have been assisting clients with the following:

-        Adding conditions precedent to agreements which account for COVID-19 circumstances;

-        Adding wording which allows for flexibility around production dates;

-        Ensuring that certain COVID-19 related situations will be captured in any termination provisions;

-        Clear provisions around responsibility for work health and safety and acknowledgement of any policies, guidelines or plans adopted by the production company relating to COVID-19; and

-        Amendments to Force Majeure wording to ensure COVID-19 coverage which potentially also cover protective provisions allowing for stand down, termination, suspension of payments, and/or shifting of production schedule where appropriate.

If you are concerned that your production agreements do not adequately cover COVID-19, please reach out for a free discussion.